FX:Dollar broadly lower vs. rivals, eyes on ECB statement
Forexpros - The U.S. dollar was broadly lower against its major counterparts on Wednesday, as market sentiment strengthened amid hopes the European Central Bank will implement more stimulus measures at its policy meeting later in the day.
During European morning trade, the dollar was lower against the euro, with EUR/USD climbing 0.56% to hit 1.2522.
Market sentiment found support amid speculation by market players that the ECB could announce liquidity injections in to Europe's troubled financial system. Other analysts expect the central bank to renew its suspended government bond-buying program to help ease pressure on Spain’s rising borrowing costs.
But the euro remained vulnerable after Spain warned on Tuesday that it was effectively shut out of credit markets, fuelling fears that Madrid will be forced to seek a bailout, while uncertainty over the outcome of Greek elections on June 17 also weighed.
Investors were also cautious after Moody’s ratings agency downgraded Tuesday evening the credit ratings of six German lenders and Austria’s three largest banks, saying they face risks if the euro zone crisis deepens.
The greenback was lower against the pound, with GBP/USD rising 0.58% to hit 1.5472.
Sterling was unchanged after Markit research group said that its index of construction activity in the U.K. fell slightly more-than-expected in May, ticking down to 54.4 from a reading of 55.8 the previous month. Analysts had expected the index to decline to 54.5 in May.
Elsewhere, the greenback rose against the yen but was lower against the Swiss franc, with USD/JPY advancing 0.52% to hit 79.15 and USD/CHF shedding 0.56% to hit 0.9591.
In addition, the greenback was sharply lower against its Canadian,
Australian and New Zealand counterparts, with USD/CAD declining 0.59% to hit 1.0317, AUD/USD surging 1.33% to hit 0.9871 and NZD/USD jumping 1.07% to hit 0.7644.
The risk-related currencies found strong support after official data showed earlier that first quarter economic growth in Australia outstripped expectations, with gross domestic product expanding 1.3%, well above forecasts for a gain of 0.5%.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.42%, to trade at 82.53.
Later in the day, the U.S. was to release revised data on nonfarm productivity, followed by government data on crude oil stockpiles, while the Federal Reserve was to release its Beige Book.
